SRA says no to price control on sugar

MANILA, Philippines - The Sugar Regulatory Administration (SRA) is standing firm on its position to let market forces dictate the price of sugar instead of placing the commodity under price control.

The SRA calculated that based on sugar mill site prices, the retail price of sugar should range from P58 to P64 per kilo by the fourth week of February.

SRA Administrator Ma. Regina Bautista-Martine said “price control is counter-productive and shall be imposed only during times of calamities, emergency situation and if proven that there is price or supply manipulation.”

Martin said “sugar trading from the farm to the traders is very transparent since bidding of sugar prices is being done in the mill site.”

The SRA head pointed out that unlike other commodities, sugar is not heavily subsidized by the government and any increase in the price of sugar directly benefits the sugarcane farmers, especially the small ones who comprise the majority.

Martin explained to members of the National Price Coordinating Council (NPCC) last Friday that the mill site price of sugar has started to stabilize and has softened compared to November 2010 prices.

Martin said the mill site price should be translated to a corresponding retail price after three weeks.

With mill site prices ranging from P2,032 to P2,300 per 50-kilo bag as of Jan. 30, 2011, retail prices in Metro Manila markets by the 4th week of February should be at the range of P58 to P 64 per kilo of refined sugar, according to the SRA.

Wholesale prices in Binondo and Divisoria markets as of Feb. 15, the SRA said, ranged from P 2,700 - P 2,950 per bag of refined sugar – which should translate to a retail price of P59 to P64 per kilo.

Martin said sugar stocks have started to build up, indicating a more stable price of sugar for this quarter.

As of last Jan. 30, refined sugar stocks amounted to 174,733 metric tons which is 19 percent higher than the previous year’s stock level.

Martin pointed out that at the current world market price level of around 30 cents per pound, the retail price of imported sugar at 38 percent tariff would be more or less the same level as the locally-produced sugar.

Meanwhile, the Department of Trade and Industry (DTI) is urging the Department of Agriculture, to protect consumers from very high sugar prices by filing profiteering cases against retailers who charge more than P65 per kilo.

At the same time, the DTI said sugar prices should drop to P54-P56 per kilo in two weeks time. Sugar prices now range from a low of P60 to a high of P70 per kilo with the prevailing price of P65 per kilo.

In an interview, Trade Undersecretary for Consumer Welfare Zenaida C. Maglaya said that they have asked Agriculture Secretary Proceso J. Alcala to file charges against sugar retailers who are selling for more than P65 per kilo. “Beyond P65 per kilo, they can already take action.”

Maglaya said that the DA can file profiteering charges even if the suggested retail price (SRP) for sugar is currently suspended. “The DA just has to prove that they are grossly overpricing their products,” Maglaya said.

“If we could only file the profiteering case, we would but since this is an agricultural product, only the DA or the SRA (Sugar Regulatory Authority) can file the case,” Maglaya said.

Maglaya said they have not yet received any feedback from the DA regarding their request.